Essential Abbreviations and Acronyms
AOB (Assignment of Benefits) refers to the patient’s authorization for insurance payments to be made directly to the healthcare provider rather than to the patient. This is indicated on the claim form and in the practice management software, ensuring that reimbursement flows directly to the practice.
CMS (Centers for Medicare and Medicaid Services) is the federal agency that administers Medicare, Medicaid, and other federal healthcare programs. CMS sets many of the rules and regulations that govern medical billing, including the format of claim forms and coding requirements.
CPT (Current Procedural Terminology) codes are the 5-digit codes used to describe medical procedures and services. Published and maintained by the American Medical Association, these codes are essential for communicating what services were performed and obtaining appropriate reimbursement.
EOB (Explanation of Benefits) is the document sent to patients explaining how their claim was processed, what the insurance paid, and what the patient owes.
ERA (Electronic Remittance Advice) is the electronic version sent to providers with the same information in a standardized format.
HCPCS
HCPCS (Healthcare Common Procedure Coding System), pronounced ‘hick-picks,’ is a coding system that includes CPT codes (Level I) plus additional codes for supplies, equipment, and services not covered by CPT (Level II). Understanding the distinction between these levels is important for accurate coding.
HIPAA (Health Insurance Portability and Accountability Act) is the federal law that established standards for electronic healthcare transactions, privacy, and security. HIPAA compliance is mandatory for anyone working with protected health information.
ICD (International Classification of Diseases) codes are used to describe diagnoses. The current version, ICD-10-CM, uses alphanumeric codes of 3-7 characters to specify exactly what condition was diagnosed. These codes are essential for justifying the medical necessity of services billed.
NPI (National Provider Identifier) is the unique 10-digit identification number assigned to healthcare providers. Required by HIPAA, the NPI is used on all claims and transactions to identify the billing and rendering providers.
PHI (Protected Health Information) refers to any individually identifiable health information that is protected under HIPAA. This includes patient names, addresses, dates, Social Security numbers, and any information related to their health condition or treatment.